October 18, 2008

How Twitter Is Going To Make Money

Twitter had some changes at the top this past week, and now that the economy is in the toilet, more and more times each day, people are going to be asking the painful question of "how are you going to make money?"

Honestly, I started out as a non-fan, but I'm now seeing things in Twitter I like. For example, it's one heck of a customer service and trend spotting tool. It's a great way to see who has problems and identify cranks who have issues.

But back to the money question. Twitter will first start making money when they commercialize their API beyond what is now open sourced.

HUH? That's right. While I'm a huge fan of open standards and open source technology, there has to be something wrapped around them to drag the cash along with it. Twitter and others will begin to find ways to take the best of Open Source and Standards and do what Ribbit only touched the surface with when they sold out to BT. Apps like Twitterfone and Twitteriffic are just a few that will pay back to Twitter in the future via a royalty relationship, not for the code-that's open sourced, but for using Twitter as part of their name.

Next is the activities around the data inside Twitter. If Google monetizes search via ads, Twitter can be the pre-cursor to ads and search by being the front line research and opinion area. Just as Google disrupts the advertising world, Twitter blows big holes in the side of opinion research biz with their wide open model.

Last is the community itself. There's no reason TwitterSwap can't come into being in such a way that eBay gets ripped apart. Twitter could take a commission on each sale.